it shouldnt rust that much unless its sat for quite a while though, the fact the inside edge is shiney means that the pads arent touching the disk properly (ie evenly)
The whole disk should be shiney like the inside edge.
It looks to me like you've either fitted new pads to scored disks, or fitted some second hand disks to your original pads or something similar. If the pads not gripping the whole disk its not going to stop properly...
for what it costs for a pair of disks and a set of pads, i'd be going out and getting them sorted, i'm very surprised it got thru an MOT like that TBH
I find the brakes on my A4 pretty good, and mine are in need of renewal.